Tuesday, 29 October 2024

Bills

Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024

Second reading

Debate resumed on motion of Gayle Tierney:

That the bill be now read a second time.

David DAVIS (Southern Metropolitan) (20:01): I am pleased to rise and make a contribution on the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024 and to indicate that the Liberals and Nationals support this bill, and we do so because of the incredible gas crisis that our state faces. This bill is a constructive step forward, but it is a step that has come far too late.

Reviewing the materials for this bill ahead of today, I read significant parts of the Environment Protection and Biodiversity Conservation Act 1999 work done by the federal government. It is worth noting that the Golden Beach gas project in Victoria had approvals granted to GB Energy Victoria Ltd on 20 May 2021 at a national level. It is also worth noting the state processes through the Environmental Effects Act 1978 and the inquiry and panel report that was provided to the government on 2 March 2021. An inquiry conducted under the Planning Panels Victoria process by Nick Wimbush, Sarah Carlisle, Trevor Blake and Sandra Brizga under the Environmental Effects Act provides significant support for the proposal. It lays out many conditions, I might add, general recommendations, and cross-references those to the various chapters in the report. There are 43 specific recommendations: pipeline licences, environmental management plans, works approval, discharge, compressors – all manner of sensible steps that have been put in place there. The inquiry recommends:

The environment effects of the Golden Beach Gas Project can generally be managed to an acceptable level and the Project approvals should be granted.

The environmental mitigation measures (amended in accordance with … other specific recommendations of the Inquiry) –

and it says this on page 125 of 163 –

should be implemented through conditions in the relevant Project approvals or the Environmental Management Plans required under the Pipelines Act and the Environment Plans required under the Offshore Petroleum and Greenhouse Gas Storage Act.

When I look at this, and I have asked for a number of pieces of correspondence, we find the state government slow – dragging chains, very, very, very slow – and yet the state’s position with respect to gas is deteriorating massively. The last exploration licences given in this state were three of them in 2013 – not a single gas exploration licence given since that time. Yet here is a solution where there is gas offshore – I will come and talk about that in a moment – which provides a supply of new gas for Victoria but also ultimately enables the caverns, the recesses from which that gas has been brought, to be used as a storage facility in the longer haul. We think this is a sensible way forward. We think that the state government ought to have acted on this. I note that Lily D’Ambrosio wrote a letter, wait for it, on the 10th of the 9th 2024. She wrote to the federal Minister for Resources the Honourable Madeleine King MP:

… write to inform you about proposed urgent amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2010 … (Victorian Act) to establish a regulatory framework for offshore … petroleum storage in Victorian coastal waters (to the three nautical mile boundary).

Let me just, in a brief process for the chamber, explain the three main zones in question here: there is onshore exploration and gas, there is offshore within Victorian waters between the coast and 3 miles offshore – note miles, not kilometres – and then the Commonwealth takes over from that point outwards. Victoria regulates the gas within 3 miles and onshore, but despite the EPBC act approvals being granted in 2021, despite the panel processes concluding in 2021 with recommendations that the matter proceed, we have Lily D’Ambrosio writing, and I repeat this, on 10 September 2024. Last month she wrote to the federal minister saying this was urgent and that:

The proposed amendments to the Victorian Act are designed to ensure energy security while the VictorianGas Substitution Roadmap is implemented to decarbonise the gas sector through electrification, energy efficiency and the transition to renewable energies.

She laid out the proposals. I am told by federal sources that the minister did not want to do any of this. She was frozen, absolutely frozen, on this and could not move. She has been pushed to it because, as the state government and the community has increasingly recognised, the crisis we face with gas is entirely of this government’s making, entirely and utterly of its failure to allow new exploration but also its failure to send out the right signals to industry and indicate that they are prepared to support new projects in Victoria. I mean, why on earth would you do much if you are a firm and you got the terrible signals out of this government? The Gas Substitution Roadmap basically says, ‘Away you go, we’re not that interested.’

Victoria does face an issue, and we are going to have to act on this. There are likely to be import terminals. There is a risk that this will be more costly for us. There is the opportunity to bring further gas from up north, but we know that in the middle of this year when it was cold and there was no wind and the solar was not so great, for a week or two we had real problems, and the gas line across the south of Queensland was running at 108 per cent of capacity. That line needs to be upgraded. The ACCC, with its processes, has slowed that down, but we need the upgrade of that line to bring more gas from further north, but there is a limit on what can be brought down those pipes. It is likely that if the Port Kembla project brings on sufficient gas, some of that will end up in Victoria too, and it is likely that we might well end up with our own import terminal as well.

There are other opportunities in the gas sector, and I spoke in Shepparton recently at the biogas forum that was run there by the Victorian biogas association – very sensible, thoughtful ways forward proposed by this seminar. There were about 100-odd people there, different firms from around the area but also wide across the state, from Melbourne, from interstate, and the truth of the matter is that there are government organisations that can play a part here. I was pleased to see Goulburn Valley Water there. I was also pleased to see the whole fruit and food processing sector so engaged in looking at ways that they can find new sources of gas from recycling bioenergy approaches.

We know, for example, that Melbourne Water submitted to the state government’s biogas process and in doing so indicated that they burn off very significant amounts of gas every year. They just flare it – off it goes. It does not do anyone any good. It does not help with the greenhouse gas challenges. It is just flared, and yet they would prefer to clean it up and put it into the pipe that is in the property next door to them down at the south-east treatment plant. They would prefer to do that. This is the Melbourne Water submission to the state government’s own processes. What I am saying here is the state government has not tackled these gas problems. There are options. There are ways forward. You need to be creative, you need to send out the right signals and you need to work with industry to achieve some of these ways forward. I say that there is a role for biogas.

We can find ways forward to do sensible things and use agricultural sources, but also our water authorities have opportunities here, and at the same time we need to be allowing exploration for new onshore conventional gas and indeed gas in the 3-mile zone offshore as well. There is lots that we can do. The state government has not done it. This has been something that the minister has been sitting on for a long period of time and not sending out the right signals about. In a now panicked mode the state government wants to move very quickly to use this approach, and we support –

Tom McIntosh: Wrap it up, Davis.

David DAVIS: You may find it inconvenient, but this is actually about the state’s future, and we need gas.

Tom McIntosh interjected.

David DAVIS: We actually do. I have just laid out a number of them. A lot of them are sitting under the government’s nose. The government does not want to engage and does not want to do the work that is required. Why is the state government so resistant to biogas? That is the question. The directions paper is now late, and the state government needs to get in and get that directions paper out there and send a proper signal out because there is a whole set of industries that cannot electrify. I have read those submissions. There are 47 submissions on the website to the state government’s biogas directions paper process. They have been conveniently summarised, and they are a very good read actually. There is very high quality information there.

Tom McIntosh: Glad you’re getting across your brief.

David DAVIS: No, I am paying credit. Brickworks, for example, they make bricks – strangely! They make a very clear point that they cannot electrify. They do need gas. They need to go to 1000 degrees to make bricks, and they need gas. They suggest that the biogas being cleaned up and injected into the gas grid, the gas pipelines, and used –

Tom McIntosh: Bring a motion on biogas then tomorrow.

David DAVIS: Because we are talking about the gas supply. This bill is about getting some new gas out of a field and then using that field as a storage for gas into the future. That is something we support, but this on its own will not be enough to deal with Victoria’s very serious gas crisis, which is the inheritance of 10 years of Labor. That is what I am talking about. I am talking about the gas crisis, the fact that Lily D’Ambrosio has not dealt with it and the fact that she has sat even on this matter, which has our strong support, and she has not acted. As I have laid out, the EPBC approvals in 2021, the state government panel report in 2021, and now we have the minister writing to the federal minister on the 10th of the 9th 2024. I am happy to provide a copy of the letter for others on the other side of the chamber if that would be helpful for them.

It is very clear that the state government recognised finally that it had to act and that the field that is within the 3-mile zone is its responsibility and requires this bill to provide the security that is required for the firms that want to utilise this resource first to get the gas out and then to use it in the long haul as a storage facility. You just cannot sit on your hands and drift as this minister does. She hates gas. She has declared war on gas, and she has been dragged into doing this. She has been forced to do this because the rest of the government have begun to recognise that their policy has not been working. The policy of drift has not been working.

No-one believes that this bill will solve the gas problem in any way on its own. It is a handy little addition. We support that, and we support the usage of the field to have gas put into it and brought out in a sensible storage arrangement, like Iona does in the west of the state already. That is a sensible addition to our capacity. Gas can be brought down from the north or elsewhere and stored in a period of lower usage and then brought out at the time when it is needed. It has the advantage of being quite near the main lines that are already there. We know Bass Strait’s capacity is falling quite steadily at the moment, and I could go on about that. But the state government needs to do all that it can. We need additional work on land and in the Victorian responsibility zone offshore. We need these sorts of projects. We need to look at the biogas options, which are significant and have a significant potential long haul to provide gas for some of those industries that will never be able to move away from some of the gas options.

People are looking, people are working and things are going forward, but the state government is the blockage here. They are the blockage in the gas pipeline that stops a solution being found, and it is Lily D’Ambrosio in particular who is personally the problem. Government members on that side of the chamber and from the other house tell me this quite regularly. They are beside themselves about Lily D’Ambrosio’s misbehaviour and inability to provide solutions in this regard. They are unhappy because they know that this is causing trouble. The price of gas has gone up massively, and the state government has done nothing to help deal with this at all. We have got to get in and assist in a sensible way, and that is why we are supportive of this bill, but we are also pushing the state government and saying, ‘Get on and do something with the biogas options. Get on and get some exploration going so that we can get more gas options, either onshore conventional gas or within the state government’s 3-mile area.’

It may be that there are other steps that can be taken too, but this bill in short builds on the petroleum act and does so in a way that provides clarity so that not just when the gas is coming out of that field but later when gas is injected back into the field for storage purposes there is clarity on who owns the gas and the owners of that gas can recover the gas without royalty or other issues. This is, again, a sensible series of steps, and we support this particular way forward. I do think that the Golden Beach natural gas storage will ultimately be able to be filled during the summer and provide that drawdown for the buffer that is needed in winter, and it will be a useful step but a modest step.

I do want to say something about the surging gas prices, though, that are hitting families – and the electricity prices; do not imagine it is not electricity too. Gas has obviously got a significant role as a crossover fuel where there is need for peaking power or firming power in our electricity grid. But it is worth just getting on record in the chamber now the surge in electricity costs that have been faced. The most recent year of figures, the St Vincent’s figures – very reliable material – actually go and look at the individual bills of businesses and households. What they found is that Victoria had the largest increase in both gas and electricity, with gas going up 22 per cent in a year and electricity going up 28 per cent in a year. They also found Victoria had the highest green scheme costs, and we will say more about that tomorrow. I do not want to anticipate anything, but there is a lot to be said about the government’s mismanagement of schemes, which could add in a worthy way but have got to be managed properly. Even schemes that conceptually can be useful need to be managed properly, and this government has not done that. But the point here is that families and businesses have been hit hard, very hard, by this government, and businesses are facing insecurity of supply but also a huge surge in costs. The state cannot compete in this way with other jurisdictions. We are now in a terrible position where the state is actually losing businesses out of the state because of the state government’s failure on energy – and other things, but that is not for tonight’s debate. But certainly on energy they have left things in a very parlous state.

This bill is a sensible bill. I will have some questions in committee. There have been issues raised with Tim Bull in the Gippsland region about issues that may confront some of the fishing fleet down there. I will seek some assurances in committee about those points.

I note in this case there is EPBC approval and there is a panel report which gives us a very good understanding of these matters. The minister after a three-year delay, sitting on her hands – I do not know what she was doing through that period of time – was finally dragged by others in the cabinet to a position where she had to move on this. I am told she actually tried to get the federal minister to take on some of this, but the federal minister made it clear that that 3-mile zone from the coast – 3 miles out – is not something the federal minister can take on. Legally it is the state minister’s responsibility, so she has had to act. The state needs the gas and the state needs the additional storage, and years after she should have been actively pursuing this, she has finally acted. Then we are told, ‘Oh, it’s all very urgent.’ It is very urgent, except that the panel report is three years old. It is very urgent, but the EPBC approvals are three years old. We hear this urgency thing from the government regularly, but actually ‘urgent’ means they have stuffed up, they have delayed, they have not had the solutions and now they are in mild panic: ‘Oh, my goodness. What are we going to do? What are we going to do with gas?’ Well, this will not get us gas next year. It will not get us gas for a couple of years, but it will get us some gas after that and it will get us some storage. It will be a modest contribution but a worthy one.

Sarah MANSFIELD (Western Victoria) (20:22): The Greens will not be supporting this bill, perhaps unsurprisingly. We are in a climate emergency, as I have had to remind this house many, many times. You cannot open new fossil fuel projects in a climate emergency – it is simple as that. This has to be the absolute starting point for any government that recognises its duty to protect current and future populations. And you certainly cannot claim gas shortages in a country that exports 80 per cent of it as LNG, or in a state that could halve its household usage by going electric.

Everyone needs to live in a warm house with access to heating, cooking and hot water. These are basic amenities that everyone should have a right to. But not only can we have all of that without gas, we can have cheaper, cleaner, more comfortable options – electrification, insulation and other energy-efficient solutions. But for decades Victorian governments and the insatiable fossil fuel companies have ensured that our households are hooked on gas – an expensive, polluting, asthma-inducing fossil fuel. To make matters worse, companies take 80 per cent of the gas that they extract off our shores, pay effectively no royalties to the Australian people and export it overseas.

We understand that Labor faces the threat of gas shortfalls in the medium term – seasonal shortages when our gas heaters are working overtime in winter from about 2028 and then annual shortages from 2030 onwards. But the problem with these forecasts is that they only ever really look at supply. What if we really seriously tackled demand? While Labor is slowly coming to the table on transitioning off gas, it is happening far too slowly. These efforts are completely undermined every time Labor opens a new fossil fuel project, exemplified by this very bill that is before us today, which has essentially been custom produced to enable the Golden Beach gas project, which will run for 40 years if approved. What that actually means is there will be a year or so of drilling and pumping out extra gas that we do not need because, as I said, we export most of what we have got, and then another 39 years of storing gas that the climate cannot afford in what we are told will be perfectly safe, perfectly leakproof offshore wells.

The government’s positive efforts around transitioning off gas are also undermined every time the government backflips on previous commitments. Sadly, the Premier recently pre-emptively gave in to the gas lobby by refusing to ban new gas cooktops – the number one source of childhood asthma. The ban on new gas space and water heaters also cannot come soon enough. Sixty-nine per cent of household gas is used in space heaters. Another 28 per cent is used for water heaters. Just think about what we could achieve if we were to ban these products from next year. What if we legislated deadlines for electrification and insulation, or provided targeted support for rentals, apartments, public housing and vulnerable households? Opponents of a rapid transition off fossil fuels claim it will cost too much, but they fail to consider the costs of delay. Every bit of delay just adds to the economic, human and environmental costs that not only grow, but grow exponentially. This storage legislation only encourages continued gas usage right at the time when the gas giants are in a shameful big tobacco style PR battle. The tactics being wheeled out are literally straight out of the big tobacco playbook – an industry that Labor has been uncompromising on – and yet they cannot seem to see that they are falling for exactly the same lobbying tricks when it comes to gas. The gas lobby and their friends over in the coalition want to preserve the reputation of their deadly product and keep governments and households hooked on it for longer. It is time that Labor grew a spine and ended its relationship with this deadly, expensive fossil fuel once and for all.

Jacinta ERMACORA (Western Victoria) (20:27): This bill, the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024, will amend the Offshore Petroleum and Greenhouse Gas Storage Act 2010 to give the holder of a petroleum production licence authority to carry out underground petroleum storage operations. This involves the transfer of existing gas from onshore to an offshore reservoir to be stored for later access. These changes are necessary to ensure existing gas supplies can be stored and subsequently made available during periods of high demand. For example, these amendments will enable the Golden Beach energy storage project being developed by GB Energy to go ahead. That project will establish essential storage infrastructure for the transfer of onshore gas into an offshore reservoir. An underground petroleum storage project such as this could provide critical gas supply to meet Victoria’s imminent energy needs. The project could help mitigate peak day gas supply shortfalls forecast for the Australian energy market by AEMO.

The Victorian government’s record on tackling climate change is clear, and Victoria was one of the very first jurisdictions in the world to put a net zero emissions target in law. The Labor government brought forward the commitment to achieve net zero from 2050 to 2045, and we have delivered our commitments. Victoria beat its first target to reduce emissions 15 to 20 per cent below 2005 levels by 2020 with a cut of almost 30 per cent. And we are not slowing down. We are on track to meet our 2025 targets and beyond. Under the guidance of Minister Lily D’Ambrosio we have developed a Gas Substitution Roadmap that sets out in detail how we will build renewable energy and transition away from gas. The roadmap sets out how we will decarbonise Victoria’s fossil gas sector through energy efficiency, electrification and renewable gases for commercial and industrial usage. This will drive cheaper energy bills for Victorian households and businesses while preserving the remaining fossil gas supply for parts of the economy where the transition off gas will take longer, such as industry. Gas is also currently necessary as firming or peaking electricity generation, turning on quickly to maintain reliability of supply during periods of high demand or lower supply for other sources, so gas will continue to play an important role as we transition to renewable energy.

Managing the energy transition will take years of hard work and strategic investment. It is not set and forget. We are working with Victorian communities and industries to develop real solutions to issues we face now and into the future, and that means ensuring we have enough gas while we go about building the renewable energy supplies that we need. That means we need to develop offshore gas storage. This bill will enable the investment we need. It is solution that our stakeholders, including the Victorian Chamber of Commerce and Industry and Environment Victoria, support. The solutions that will be enabled by this bill will mean that gas can be stored offshore and then injected into the system during periods of high demand. This is exactly what Victoria has been doing for many years on shore. This bill establishes a consistent regulatory regime to make sure offshore gas storage is done safely and effectively.

Victoria needs new sources of gas supply to meet demand and keep our industries and communities thriving. For those who cannot yet move away from gas this bill will help to ensure that they have supplies they need. Longer term Victoria’s Gas Substitution Roadmap sets out how we will decarbonise Victoria’s fossil gas sector through energy efficiency and, as I said, electrification and renewable gases for commercial and industrial usage. This will drive cheaper energy bills for Victorian households and businesses, and the Allan Labor government is the only government I would trust to oversee this transition. I support this bill.

Richard WELCH (North-Eastern Metropolitan) (20:32): I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024. This bill is perhaps a classic example of what happens when ideology comes into conflict with reality, because we need gas. We need gas for industry, we need gas for families, we need gas for cooking and we need gas for heating homes. By extension we therefore need storage for gas and by extension we need supply of gas, which really makes you understand that this bill is in effect the latest capitulation on the anti-gas policy.

First of all, we were told repeatedly from the other side that we do not need to search for any more gas – there is no more gas. And yet suddenly we discover there are reserves of gas. In fact now for the first time in 10 years we are putting out search licences to get some gas that we apparently did not need. Then of course we came up against the inevitable thing: we do not have storage. So now we need to have storage.

The people of Victoria should be absolutely crystal clear in their minds – this is capitulation. This is them admitting that in reality, no matter the rhetoric or the hubris, we need gas and we are going to need it for the foreseeable future because all the other roadblocks that they have got mean they cannot give Victorian businesses and families reliable supply. So we need to have gas, and this measure, as welcome as it is, is too little too late. If you are the captain of a very big ship, a very big seagoing vessel, and you need to turn a corner, you need to be making that decision very, very early. Instead we have had a decision made in September 2024, when we are going to be without supply within potentially the next year.

There are a number of things that this has to get through. It still has to get through environmental requirements – it has to leap those. Even though the Australian Energy Market Operator forecast this, really what the government has been doing is being too busy driving business to the wall with artificially inflated energy prices. The energy price crisis that we have got in Victoria, which is a key contributor to our cost-of-living crisis, is a completely artificial crisis. We have the gas, we have the energy, we could be supplying it, we have chosen not to, we have chosen not to back it up with infrastructure, we have chosen not to back it up with searches for additional gas and therefore this is an artificially created crisis. But Victorians will pay the price.

Perhaps you could be a little forgiving if the alternatives were actually somewhere in place, were somewhere on the horizon or were somewhere visible in this, but they are far from it. They are far behind schedule. It is even more bizarre that when there are alternatives like waste-to-energy electricity, the Minister for Energy and Resources herself, in her own electorate, chose to raise a petition against it, which is a bizarre circumstance really. ‘Well, we must have this energy, we must get off gas, but not in my backyard. As long as it’s in the western districts where it may not affect my vote in my electorate. As long as it’s over there or as long as it’s down at Lakes Entrance or somewhere. As long as we shove it where it’s not going to affect me.’ Again, this is, as my colleague said, a panic move. They have been forced, dragged kicking and screaming, to do this very, very basic thing. It is typically going to be badly planned. It is probably going to be badly executed. It will extend our crisis rather than remedy it, but at least they are doing something, however unwillingly.

I conclude by simply pointing out that this is a capitulation. That is what this is: it is a capitulation on gas. They can no longer stand in public and tell us that we do not need gas. They can no longer stand in public and say we should keep running down our gas infrastructure and our gas industry, because they need it – because Victoria needs it.

David LIMBRICK (South-Eastern Metropolitan) (20:36): The Libertarian Party will also be supporting this bill, which seeks to allow an existing gas well to produce some of the gas that is left in it and then later on store that gas for when it is needed by Victoria.

I would start by saying that what we have done in Victoria is tie our hands behind our back on energy by banning various technologies. We banned fracking technology by putting the ban in the constitution, rather ridiculously, in the last term of Parliament. We have also banned nuclear technology. Unfortunately the government seems to have been dragged along by these extremist ideas from the Greens and others that Victoria is going to save the world if we stop burning gas, and of course that is not going to happen. We are nothing more than a rounding error in the scheme of things. Really, everything is controlled by China and America and India and those other big countries that are far more influential on everything than us. We are tying our hands behind our backs and impoverishing ourselves instead of putting Victoria first like we should be and producing gas that we need for this state. We do not just need it for residential and industrial purposes, we also need it, ironically, to produce electricity to back up the variable renewable energy that we cannot depend on all the time on the network. We do not have battery capacity, and we will not have battery capacity to replace gas anytime soon. We are going to need gas for the long term, and we need to acknowledge that.

I am glad the government has brought forward this bill, in some small way acknowledging that, yes, we do need gas for a long time. We need to do more: we need more exploration, we need more licences and we need to do everything that we can to ensure that we have a gas supply for this state, because we do not want to be in a situation where we cannot run businesses. I have spoken to many businesses in the south-east that require gas, as has been brought up by others in their contributions to this debate. They simply cannot electrify because of the nature of their business. I have spoken to plastics manufacturers. I have spoken to many types of factories, and on top of all of the other problems that they are having at the moment with land tax increases, with labour shortages and with inflation costs, they have got huge energy bills. Many of these companies are doing everything that they can to make themselves more efficient energy-wise. They are putting solar panels on the roof. But as I said, many of these places simply cannot electrify; they need gas. We are going to be adding more and more gas to our electricity network. As we increase our variable renewable output, we will need more and more and more gas to back it up. Gas is not going away anytime soon, and we need to get real about gas production in this state.

There are lots of opportunities for onshore gas. Unfortunately we banned some technologies, but we do still have the ability to produce conventional onshore gas. As has been brought up by others, there are also potential opportunities offshore. We are blessed with such great resources in this state, and the government seem to do everything that they can to tie our hands behind our back and stop these resources being developed. I am glad that we are finally doing something here.

I would also urge the government on another gas project, not methane gas but hydrogen gas. I know that we have a Japanese consortium that is very keen to start up a brown coal to hydrogen project in the Latrobe Valley. I think it is a $2 billion investment. It has not been approved yet. I do not know why. This state needs foreign investment. We need capital coming into the state. We need to do everything that we can to attract it, and we need to send a message to the world that we welcome foreign investment, we welcome energy production, and stop buying into this sort of extremist thing that, well, if we only suffer enough and if we cut our consumption and cut our carbon emissions we will save the world. We will not. We are insignificant in the scheme of things globally. Other players have far more influence on anything to do with carbon emissions than we do. We need to stop this mindset and start putting Victoria first.

Tom McINTOSH (Eastern Victoria) (20:41): The Liberals have no idea when it comes to energy. No plan, no policies. It is just no, no, no from the noalitions. It is fear campaigns and it is political tricks. And whilst the Greens are disconnected from reality and always call for 110 per cent of everything tomorrow, the Liberals play their tricks from the other side –

David Davis: He is a goose for actually supporting it.

Tom McINTOSH: continuously saying that the sky is falling in. Well, Mr Davis, I am going to come to you in a moment. The prize goose is sitting in the boiler. I am going to come to you very soon. Wholesale gas prices are at the lowest on the east coast at $13.58 a gigajoule. Residential gas bills are the lowest on the east coast. Commercial users are consuming 500 gigajoules a year, the lowest on the east coast. Residential, lowest prices in the National Electricity Market (NEM) at $30 a megawatt.

Mr Davis, this year continuously in here on the record, you have talked about base load power. I think the penny has now dropped for you. That is an old concept that is not relevant to today’s energy market. Like housing, those opposite do not care about the next generation. You just want to bury your head, use cheap, divisive politics rather than getting on and setting a plan and setting up our state for the future.

And of course, we have not heard the opposition reference climate change. They never do. They never want to acknowledge the issue that we must deal with. They do not want to get on about securing the generations of jobs that will come out of renewables, and this is why Victorians have entrusted the Labor Party to govern the state, and whether it is jobs, whether it is housing, whether it is education, whether it is health, whether it is energy or whether it is action on climate change, they trust us to have the plan, to implement the policies and get on delivering for this state.

Bev McARTHUR (Western Victoria) (20:43): I have no objection to this bill, because I am in favour of gas, unlike those opposite, and the offshore gas storage infrastructure it will enable can be no bad thing. Additionally, I understand the bill came at the request of industry. No surprise there. For someone who believes that a thriving private sector economy is absolutely essential for our state, that is important as well. Once upon a time this would have been quite normal. In fact, the few bills which were not welcomed by industry were most likely opposed on the grounds they granted too many rights to workers. These days we have legislation which favours neither industry nor the workforce. Everyone is a loser – everyone, that is, except the ideological extremists who believe any economic growth, indeed almost any economic activity, is damaging to our pristine environment. They are the winners here. And notice I did not say that the environment is the winner; it is frequently just the activists, their political wing, their charitable agitators, their academic taxis for hire, their cheerleaders in the commentariat and the chattering classes. Because all too often the ideology wins but the environment does not.

We see that in short-sighted policies like banning native timber without replacing it and instead relying on huge-scale importation from distant continents of product grown with far fewer environmental controls than exist here, simply offshoring the damage. It is indefensible. Ditto nuclear power, which is rejected on outdated and ideological grounds, despite the environmental benefits of having lower emissions than coal or gas and utilising existing grid networks instead of environmentally damaging above-ground transmission lines. Ditto waste to energy, which is blasted by the Greens for the same reasons of principle. What is more damaging to the environment than putting waste in holes in the ground and creating methane? Burning waste is environmentally sound. There are no downsides. Look at how they are doing it in Scandinavia and around the rest of the world, and yet, no, we insist on putting rubbish in holes in the ground because the Greens and some in the Labor Party do not like to burn waste.

It is not just ideology, though; it is also because these extremists seem utterly determined to make the best the enemy of the good. No-one says waste to energy or indeed nuclear is perfect, but that is not a good enough reason to block it. We have to weigh up the alternatives and inject some balance as well as realism into the debate. So to recap, business does not benefit from this form of activism, nor does the workforce nor any Victorian household or business paying energy bills.

Finally, the environmental benefits are questionable too. There is no such thing as energy without any environmental cost. There is no such thing as human civilisation without any environmental cost. Pretending otherwise is indefensible, opportunistic, student-level politics. Ladies and gentlemen, the Greens writ large. Where this debate should really start is for all sides to accept that there is no environmentally perfect solution to providing energy and sustaining civilisation. Absolutism in any form is dangerous. There is no silver bullet to reduce carbon emissions.

Electricity generation is the easiest form of energy to decarbonise, but when we recognise it makes up only a fraction of our overall energy usage the damaging reality of enforcing net zero before we have developed the technological capability becomes clear. In recent years we have achieved reductions in carbon emissions, but these first cuts were the easiest ones. As we move in the direction of net zero further reductions become technically more difficult and exponentially more expensive. This is why I describe absolute adherence to net zero as an ideological, extremist and damaging position. A pragmatic approach could achieve substantial emissions reduction at a fraction of the financial and environmental cost of a renewables-only solution.

Every available method of generating electricity has risks, financial costs and environmental downsides. The truth is that we need to balance each of these factors. Risks are inherent in all operations. Look at the dam collapses in hydro-electric power or the recent tragic death of 23 South Korean workers in a lithium battery plant. The old Cold War-era nuclear scare stories are, quite rightly, losing their power. The Fukushima earthquake and tsunami killed around 20,000 people, but the single death attributable to the nuclear power plant occurred seven years later and remains a matter of contention. I am agnostic on energy generation. I just know we need more power, more reliable power and cheaper power. I have absolutely no objection to renewables per se, but I do reject the greenwashing which ignores the environmental cost in additional transmission lines as well as the damage done in the necessary mining, manufacturing and site construction.

In my mind electricity is so basic and essential a service that assuring its affordable and reliable provision should be among the government’s very highest priorities and political pointscoring or image polishing should not even be a consideration.

This bill, which supports the longer-term storage of gas and enables its delivery at times of highest need, is a good thing, because gas is a good thing. It is relatively plentiful, relatively cheap and relatively clean. We have existing supply, existing extraction infrastructure, existing transmission networks and existing technology, and there is plenty of onshore conventional gas. It is impressively flexible, useful as pipe gas for cooking, heating and industry and in the generation of electricity to provide affordable base load. As many speakers have also suggested, it is actually essential for many forms of industry. We cannot kiln-dry timber without gas, and we cannot process milk into powder without gas.

David Davis: You cannot make bricks.

Bev McARTHUR: You cannot make bricks without gas. I mean, electricity does not cut it. You need gas. So what do we do? Kill off those industries while we are on the getting-rid-of-gas bandwagon. As noted, ‘relatively’ cuts no ice with the absolutist activists. They cannot wait for technology to develop, for market incentives to improve power efficiency, to lower emissions and to bring on line new and generally economically sustainable low-carbon energy. Instead, their absolutism creates perverse outcomes.

In a debate a few weeks ago I quoted the federal government’s figures from the Australian National Greenhouse Accounts Factors 2023, the most comprehensive and up-to-date reckoning of carbon emissions. They show that in totality, the Victorian electricity grid, including the renewables employed, emits 220 kilograms of carbon dioxide per gigajoule of energy produced. The Victorian natural gas pipeline network emits 51.4 kilos per gigajoule – that is less than a quarter for the same amount of energy, less than a quarter of the emissions from gas. So we can see the danger of an ideological charge towards all-electric homes, heating and transport before we have completely rebuilt the generation and transmission network. The real-life consequence of energy absolutism, of ideology over pragmatism, of activism over realism, will be emissions four times greater. Until we can overcome the economic and environmental drawbacks which challenge any renewables-dominated power system this will remain the reality. In contrast, this legislation will enable investment in our energy security and I hope will go some way to helping to keep prices low. So I welcome this bill and anything else which encourages balance in the debate and balance in our investment in energy infrastructure.

My only concern is that Labor will find a way to tax it. As I said in the last sitting week, the Treasurer milks $256 million every year from AusNet in land tax payable on transmission line easements – money which comes directly from Victorian energy bill payers. How long before the Treasurer finds a way to charge land tax under the sea? And he has got form on these unconstitutional tax grabs. Remember the electric vehicle charges?

David Davis: The High Court did not like that one.

Bev McARTHUR: No, the High Court fixed that up. Nonetheless for now at least I am happy to support the bill.

Sheena WATT (Northern Metropolitan) (20:54): I rise today to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024. Like many other bills I have spoken on with respect to climate action, I am acutely aware of the nuances embedded in this bill and perhaps better placed than many to discuss the complicated issue that we are dealing with here. As a state I have got to tell you Victoria is threading a really delicate needle when it comes to gas regulation and of course climate action. I know that those opposite would like us to give up entirely, and I know some others in this place want us to legislate as though our power grid is in place and we can leave gas behind, like it is not critical for business and industry. Neither of these courses of action are acceptable to me because they would drive up household costs for Victorian workers and they would undermine our ability to reach net zero emissions. I am convinced that the actions allowed by the bill before us, under the leadership of the Minister for Climate Action, will both keep the lights on in the short term for Victorians and ensure that we have a renewables-powered grid to pass on to future generations.

Can I just start by saying very clearly that gas is a finite resource. Like all material resources, if we do not treat it with measured forethought, we will squander this resource and we will be worse off for our ignorance. There is a very real risk that if we were to become a do-nothing government, like those opposite want us to become, Victoria would begin to see depleted gas supplies within the next parliamentary term. Less gas means more expensive gas, and for homes still depending on gas power in some form, this means higher bills, high financial stress and even higher rates of energy poverty. For Victorian businesses this again means higher bills and lower profits, and for an energy grid which still has gas in its mix, like Victoria’s, the sudden loss of gas – well, frankly, it is bad news.

This will not always be the case. By 2035 we will have transformed our energy grid to move away from gas and instead rely on almost 100 per cent renewable energy production, in the process creating 59,000 renewable energy jobs and keeping the lights on for future generations. We have wasted no time working towards our renewable energy future, and in 2022–23 over 38 per cent of electricity generated in Victoria came from renewables – more than three times what we inherited from those opposite back in 2014. There are of course many works that we have undertaken since 2014, and we have created over 5100 jobs in the process for Victorian workers. This is only going to be accelerated by the SEC – I am very proud to have voted in strong support for its enshrinement in the Victorian constitution just a few weeks ago.

Construction is already underway on the SEC’s first project in Melton, which is one of the biggest batteries in the world. I had the pleasure of attending the unveiling of one small portion of that battery at a warehouse in Mulgrave just last week, and let me tell you, even that small portion of the battery could not fit through the doors of the warehouse. Because of the SEC this project is happening sooner and will be bigger than it otherwise would have been. With over 100 companies lining up to partner with the SEC, there are plenty more projects like this to come. It is about delivering more affordable, more reliable renewable energy owned by Victorians, with every cent of profit being reinvested back into the SEC, putting power back into the hands of Victorians as we meet our ambitious targets for nearly 100 per cent renewable energy by 2035 and net zero by 2045. There is so much more that we need to do, but let me tell you, if we do not act now to shore up our gas reserves, we are doing a disservice to young people right across the state, who will inherit the effects of whatever action we do or do not take right here and right now.

The simple solution, which will keep the lights on as we transition to renewable energy production, is to allow for short-term gas storage in natural deposits before exporting it to the grid. It is hardly a new idea, can I just say. It is something we have been doing onshore for many years, but its current legal status in offshore settings really is uncertain, and this bill before us will clarify the legal status of offshore gas storage and establish a consistent regulatory regime to ensure that offshore gas storage is done safely and done effectively.

The truth is that this bill takes no backward steps. It only allows our state to keep moving forward to where it needs to be. We need to lay the foundations for 2045 right here in 2024. We need to invest in smart choices now to maintain our energy grid so that we can pass it on to future generations. What gas we have left we need to have better control over – its release into the grid – and that is why this bill allows gas operators to store gas reserves in natural offshore deposits before their release into the energy grid, only doing so when they are needed most. There is so much feedback that we are getting on this, but it is consistent. We know that this needs to happen, and it is clear that we need offshore storage to keep a reliable supply of gas in the mix as we transition to nearly 100 per cent renewable energy by 2035.

I might get off here a little bit early. I have got to tell you: gas will form part of our energy mix as we make the transition to renewables and to net zero here in this state by 2045. That is why this bill is so important; it threads a delicate needle to keep the lights on for all Victorians as we move towards a more sustainable future. I commend this bill to the house.

Melina BATH (Eastern Victoria) (21:00): The Nationals are pleased to support the Offshore Petroleum Greenhouse Gas Storage Amendment Bill 2024 this evening. As I have been listening to the commentary and contributions of members of the house I have been thinking about the landscape of Victoria’s energy needs and energy sources. Looking up the National Electricity Market, which of course you can do on your mobile phone, we see that there is quite a diverse range of energy supplies into our state. Solar is not working of course because it is evening time. Of course there is no solar being put into the system. Whether there is enough battery in the system is certainly something to be debated. Diesel is quiet at the minute. There is still wind generation. There is a little bit of pumped hydro. There is of course coal, and in my area in Eastern Victoria Region the Latrobe Valley is still producing a great percentage of Victoria’s electricity needs. Of course there is gas, and this is where gas can be so nimble in the energy sector.

During the day Mortlake Power Station – that is over in the west, in Mrs McArthur’s area – was indeed shut and not producing any electricity. Tonight after the sun went down it kicked on and went online, and it is producing around 270 megawatts of electricity. That is the thing about gas – it is flexible, it is nimble and it is highly useful in this state. It will be useful for many years to come. On any given day about 23 per cent of the energy mix is natural gas peaking, but it is also used as feedstock for industry – for important industry, for the plastics industry. If you go into any hospital, we have got plastics – so many plastics – that are used in a very important and medical way. Also it is used for industries where, as we have heard before in debate tonight, it cannot be used in any other sector.

We know that in Latrobe Valley we have got Australian Paper, which is no longer making white paper from hardwood timber but is turning out loads and loads of cardboard because we are all buying things online and getting them delivered. We do not go into stores anymore; we just go online. Thank goodness we have got Maryvale Australian Paper producing cardboard. It also runs on and desperately needs ongoing gas. Mind you, it is about to produce its own thermal energy through energy from waste, and of course the Nationals support energy from waste when of course it is that advanced technology that this plant will be using, cutting down the use of gas and removing the carbon dioxide released from gas. There is a transition ahead, and we are in that state of flux.

We heard – and I acknowledge the lead speaker – Mr Davis speak about Victoria’s and particularly Minister D’Ambrosio’s abhorrence of anything sensible, anything gas. Indeed she has been at war with the federal Labor government in policy for many – well, she is at war with virtually anybody with a sensible idea. But Victoria’s Gas Substitution Roadmap takes an anti-gas stance. It is blocking gas appliances in your homes and in your new builds. It is banning gas connections. The Premier did not come out the other day and backflip. You just have to read the fine print. She is still banning gas in new homes. When we think about these tall towers that are going to be built all over the place, we know that if it is solely and wholly electricity, it is going to cause significant technology problems and structural problems to implement those on a grand scale. But that is not for me to decide.

We shall move to the point where we had the federal minister, Minister King, on the future gas strategy saying:

Gas plays a crucial role in supporting our economy …

I actually support that position, albeit it is from a federal Labor minister. We know that the Australian Energy Market Operator is telling us – and it has been forecasting this –that there will be a gas shortage as early as 2026. I remember a few years ago, just post the closure of Hazelwood, we saw lorry after lorry, B-double after B-double, carrying shipping containers of diesel generators into the Latrobe Valley to make up for the potential blackouts and brownouts. We need gas to be that nimble source of power.

This bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2010 to enable offshore underground natural gas storage within Victorian waters. We know there is the onshore Victorian jurisdiction; there is the 3-mile offshore, which is also Victorian jurisdiction; and then there is the Commonwealth jurisdiction post that. For many years off the Gippsland Basin gas has played a very important role – as well as petroleum – the Longford gas plant producing so much of this state’s gas and interstate gas as well. But there comes a time when there is an opportunity to do what has been happening in the west, in that Iona area, and use that as a reservoir – not necessarily the same geological deposits but with the Golden Beach facility – to be able to store and reserve that gas when it is not required in the warmer months. Again, you only have to put the system under pressure to see that brownouts, blackouts and load-shedding for businesses and industries are a real potential. The good news is that it can do that. We have seen, certainly in the Otways, that this has happened. We have seen that it has been a real support and has provided that flexibility.

Golden Beach will supply a valuable storage capacity, and boy, does Gippsland need it, because as Mrs McArthur talked about before – and I know Ms Watt also spoke about finite resources – there is one resource that is infinite, and that is native timber. We talk about reducing our carbon footprint; well, one way would have been to continue the native timber industry. To keep this very relevant to this topic, the IPCC – the Intergovernmental Panel on Climate Change – in its 2019 document said a sustainable yield of native timber, of renewable timber, can supply fibre and energy into the future, and that is climate mitigating. Those are not my words; I am using the words of the IPCC report.

There is one issue that my dear colleague Mr Tim Bull, the member for Gippsland East, raised in his speech – and I want to put it on record that I share his concerns, which I hope the minister at the table, Minister Stitt, will address – and that relates to the Lakes Entrance’s fishing fleet and the South East Trawl Fishing Industry Association. They have voiced their concerns around potential exclusion zones and disruption to their fishing area. It is important, as this bill passes through this house tonight and the infrastructure work begins on implementing this sensible bill, that their concerns are addressed. I will put them on record. As I said, I gave my commitment I would, and I am sure the minister will provide some fulsome answers in the committee of the whole.

I would like the minister to talk about the seabed infrastructure. Will there be any seabed infrastructure located off the coastline of Golden Beach? Will it have an impact on the commercial fishing fleet, or can the infrastructure that goes that there, whatever it is, be fished over the top of? So is it just a structure that will become part of the seabed and that therefore, when we have got nets in there from the fishing industry, they will be able to conduct business as normal, or will there be an exclusion zone? And if there is an exclusion zone, what impact will this have on commercial catches and the ability of the fishing industry to catch their quota?

It is very important that we discuss this in terms of carbon footprints. Indeed if we look at our local domestic Victorian fishing industry, we must continue to support it. I know there is a big discussion in the lower house about the fishing industry and its importance today. I commend my lower house colleague Emma Kealy, the Shadow Minister for Agriculture, for taking the fight up to the government on that bill, but more about that in sitting weeks to come. But importantly, we need to support our domestic fishing industry. We need to hear its concerns, and we need it to be a thriving industry. Otherwise we will import more and more fish from overseas, increasing the volume of imports and creating more carbon footprint than we need.

Summing up with my last few comments, we have an inquiry – we have many inquiries in this place. The Environment and Planning Committee has an inquiry, which was put forward by the Greens, and we are conducting hearings and sessions. We had a scientist the other day saying that in terms of renewables, it is okay with solar installations or solar plants – I will not call them solar farms, but solar installations – that you will just be able to have farm animals. They will be able to graze underneath the solar installations. I am quoting from memory – it will certainly be on the web very soon if it is not there. But fancy that, can you put a cow under a solar installation? I doubt it very much. What will the grass be that is growing under there? The reason I raise this is because it is very important that you give regional people a voice in this whole transition to renewables. I note that the Liberals and Nationals have a policy in relation to renewables. It is all about giving back the voice and the rights of local people in regional areas.

The other thing that this bill does is it uses a very similar technique that carbon capture and storage does. It does it in the west as a scientific endeavour. The C02CRC has been there for many years. My dear colleague the member for Morwell had the opportunity to take a quick trip for a couple of days over to Japan, and he met with Japanese officials who talked about the importance of the hydrogen supply project. We heard Mr Limbrick talk about this in his contribution. They are champing at the bit to use hydrogen supply and create hydrogen from, first of all, brown coal and then to use carbon capture and storage similar to what we would be doing for natural gas but in a different location and from a set of geological deposits out off the Gippsland basin as well. They are champing at the bit. This government has got a perverse ideology in relation to that. It is dragging the chain on this. We have got other governments willing to invest. There needs to be a whole lot of work. I am not saying that there is not still more work around that, but let it go through and encourage that investment.

This legislation, I believe, is part of the solution. It is a very small part. It is about storage, but it is also about building more energy resilience – and by heck do we need that under the current Labor government.

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (21:13): This is a straightforward bill. It seeks to amend the Offshore Petroleum and Greenhouse Gas Storage Act 2010 to clarify that offshore underground gas storage is permitted in Victoria. This means that gas can be stored offshore and then injected into the system during periods of high demand. This is exactly what Victoria has been doing for many years onshore, and this bill establishes a consistent regulatory regime to make sure that offshore gas storage is done safely and effectively. The bill is necessary to allow projects like the Golden Beach energy storage project to go ahead, and this project will be critical to managing peak-day demand in 2027 when producing gas and then providing long-term stability to the east coast gas market as a storage facility from 2028 onwards.

AEMO noted the critical role that deep storage will play across the east coast in the renewable energy transition. The Golden Beach energy storage project involves the development of the Golden Beach gas field in the Gippsland basin, and it is expected to deliver natural gas production of up to 30 petajoules over a year from winter 2027, about a quarter of Victoria’s annual household and small business consumption. The field will then be transitioned into an underground storage facility, providing approximately 12.5 petajoules of storage, increasing Victoria’s gas storage capacity by almost 50 per cent. The Golden Beach project is critical to Victoria’s future security of gas supply. If we do nothing, as some might seem to think is the answer, there will not be enough gas to around.

The days of cheap and abundant Victorian gas are over. AEMO is forecasting Victorian production to fall by 48 per cent over the next four years. There is simply not enough remaining gas to offset such a rapid rate and scale of depletion, so doing nothing is simply not an option, and that is why we must do two things: we must do whatever we can to support Victorian families and businesses that are able to to get off gas, slashing their power bills in the process; and we must bring on new transitional gas supply. This bill deals with the latter, while there is another bill before this place that deals with the former. This is the clearest evidence yet that the Victorian government is the only political party in this state with a pragmatic gas policy. The opposition want to pretend that we are living in the past. The Greens, on the other hand, want to skip ahead to the future. Neither wants to deal with the facts that we are facing today. The facts are that our once cheap and plentiful sources of fossil gas are now fast declining and increasingly expensive. New gas production in Victoria will not happen at sufficient scale or speed to change the overall trajectory of the sector. This is because of geology, not ideology.

As we have always said, there are some gas users who simply need to continue using gas for the foreseeable future. This includes industries using fossil gas as feedstock or for high-heat applications. Even in those cases our nation-leading gas substitution agenda will help them. By assisting those who can switch away from fossil gas, we free up supplies for those who rely on it. Pretending there is some plentiful source of conventional gas that has been locked up by the government, as some opposite do with reckless abandon, is just a myth.

Of course phasing down our use of fossil gas will take many years. As the Australian Energy Market Operator identified, there will be significant challenges to the east coast gas market supply from as early as 2028 onwards. It might seem incongruous that we need new supplies of gas while we transition away from fossil gas use, but it is simple maths. The rate of decline in gas production is faster than the current rate of demand reduction, so some additional interim supplies will be needed to maintain the balance. We take that seriously, and that is why we have supported the GB Energy’s enterprise project and we are supporting offshore gas storage through the bill that we are debating in the house this evening. I commend the bill to the house.

Council divided on motion:

Ayes (34): Ryan Batchelor, Melina Bath, John Berger, Lizzie Blandthorn, Jeff Bourman, Gaelle Broad, Georgie Crozier, David Davis, Moira Deeming, Enver Erdogan, Jacinta Ermacora, David Ettershank, Michael Galea, Renee Heath, Ann-Marie Hermans, Shaun Leane, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nick McGowan, Tom McIntosh, Evan Mulholland, Rachel Payne, Harriet Shing, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Sonja Terpstra, Gayle Tierney, Rikkie-Lee Tyrrell, Sheena Watt, Richard Welch

Noes (5): Katherine Copsey, Sarah Mansfield, Aiv Puglielli, Georgie Purcell, Samantha Ratnam

Motion agreed to.

Read second time.

Committed.

Committee

Clause 1 (21:26)

David DAVIS: I have just a couple of questions on a couple of topics for the minister which would fit well into a purposes clause set of questions. It has been raised with the opposition that there may be some clash, some difficulty for a number of fishermen particularly out of Lakes Entrance, with the proposed offshore storage that is within state waters, inside the 3-mile boundary – that there may be some impact for fishermen – and I just wonder if the minister is prepared to put on record that the government would engage in a careful consultation process and what assurances I could give to those fishermen.

Ingrid STITT: I understand that the member for Gippsland East in the other place raised a number of issues during the second-reading debate in the Assembly, and I understand that since then GB Energy have been engaging with his office directly and working constructively to engage on those relevant commercial fishing industry issues and also with fishing groups and stakeholders. I would like to place on record that the Allan Labor government are very strong supporters of the commercial fishing industry and the tourism industry and that obviously both those industries are so critical to the growing regional economy of critical regional centres like Lakes Entrance. So I can give that assurance that indeed the government is absolutely committed to consulting and has begun that process via the member’s electorate office.

David DAVIS: I am sure the member for Gippsland East will be very happy to see that on the record. He is a fierce advocate for his community and for the commercial fishing sector within his area.

The other question I had related to the zone between the coast and the 3-mile line, which is regulated by the state – it is state responsibility. Beyond the 3 miles is of course federal responsibility. My question is to the minister: this regime that has been established inside this bill, soon to become an act, will enable the injection of gas back into storages and then the recovery of that. Beyond the GB Energy example, which this bill is heavily directed to – but the bill is actually a general bill and will apply to other case studies – is the minister aware of any other case study along the Victorian coast where there could be an application or where the government would be prepared to look at an application?

Ingrid STITT: Mr Davis, we are aware that there are some considerations occurring about future projects, but nothing has been formally brought to the government. At this stage, there is nothing confirmed.

David DAVIS: I ask the minister this question: will the government facilitate such projects or such approaches if firms come forward, and how?

Ingrid STITT: This bill is specifically about giving that certainty that we can have storage offshore. Of course if there were proponents who wanted to pursue projects, they would be subject to the normal regulatory arrangements, including environmental assessments and the like. But this is about facilitating storage offshore. It is pretty narrow.

David DAVIS: I understand that, Minister. I understand what the bill does, and we support what the bill does. But it is of general applicability, and I think you are correct that there would obviously have to be normal environmental rules and so forth adhered to, but what steps will the government take to encourage, foster or facilitate gas or the storage of gas in this 3-mile zone?

Ingrid STITT: Perhaps if I can answer you in this way, Mr Davis: as I said, this legislation allows offshore gas storage in Victorian waters to proceed. It does unlock the $750 million Golden Beach energy storage project off the Gippsland coast, and that is significant. But in terms of other actions: approving production licences for Beach Energy’s Enterprise field in September, approving production licences for Beach Energy’s Artisan and La Bella fields in the Otway Basin as part of the Commonwealth–state joint authority, and pushing for broader AEMO powers to maximise storage inventory at the Dandenong LNG facility to provide critical support during peak demand periods. That is the flavour, I suppose, of the types of other actions that the government is supporting.

David DAVIS: I thank the minister for those contributions, which do help give some picture. But perhaps my question should be more particular and specific. Will the government actually foster and support and encourage firms to come forward with applications from this 3-mile zone?

Ingrid STITT: Commercial proponents are able to come forward at any time and engage with the regulator as they see fit. As I have explained, any project would need to go through the required approval processes and planning approvals.

David DAVIS: I think the minister has in effect answered my question by saying that the normal processes will apply. There are no steps that the government is taking to encourage, facilitate or foster search or proponents to come forward within that 3-mile zone. I think that is what the minister is saying in effect. If she is happy with that, I am happy that that is what she is saying.

Ingrid STITT: I think I understand what you are inviting me to get into, but I am choosing my words carefully because obviously this is part of a broader transition and this is just one part of many actions that the government is taking to ensure that we are transitioning our energy systems in Victoria and dealing with the reality of the reduction in the ability for us to continue to rely on gas into the future.

David DAVIS: Again I thank the minister. She has provided some elucidation, but I just need to press a little further and just ask very clearly: from what you are saying, the government has no active plans, no specific steps to encourage or foster those proponents to come forward in that 3-mile zone?

Ingrid STITT: You are asking me, Mr Davis, to sort of crystal ball about what other proponents might come forward in respect to offshore storage. What I am saying to you is that the government continues to take a range of active steps to support the reliability of supply for all Victorians. Of course the substance of the bill that we are debating today is about permitting offshore gas storage in Victorian waters. The government recognises that there is a need for transitional gas supply, and if a project developer wishes to explore opportunities to produce commercial quantities of gas for the domestic market, they will be welcome to engage with the regulator. The government is also closely engaging with prospective suppliers to ensure all regulatory processes are completed efficiently and effectively.

Mr Davis, while I am on my feet, I have got some additional information in relation to fishing. I am happy to put that on the record if you would like for the benefit of our friend in the other place. In addition to what I have already indicated, assurances that fisheries interests are taken into consideration and how that would occur, GB Energy has committed to considering fisheries’ interests in the area over the life of the project. A petroleum safety zone, which creates an exclusion zone for all marine activities, not just fishing activities, will be sought for the periods when the drilling rig and construction equipment will be onsite.

In relation to the next phase, production, GB Energy will consult with the community, including fishing operators, as per its commitment in the environment effects statement, to garner their views of a petroleum safety zone around the wells. This engagement is essential to support GB Energy’s application – if it is to be made – to the National Offshore Petroleum Safety and Environmental Management Authority, NOPSEMA, for a long-term petroleum safety zone. Irrespective of whether a long-term petroleum safety zone will be put in place, GB Energy will install a fishing-friendly structure over each offshore well so that trawlers will not have their nets snagged. These structures will also serve to protect the wellheads from any dropped objects. Due to the size of the offshore equipment to be installed, these structures are typically more than three storeys tall. Hopefully that provides you with a few assurances that I am sure will be welcome.

David DAVIS: I thank the minister for those assurances, and I am sure my colleague in the other place will be reassured by those and he will convey those to his business community locally. I do not propose to go any further on the other matter other than to state that the opposition does see that government has a role to encourage the industry to search within the parameters of the state areas of responsibility and to do so safely and to do so with the proper environmental oversights. But we do need industry engaging to find more gas, and we certainly are prepared, particularly onshore, to see onshore conventional gas as part of the solution. That is a comment, and I thank the minister for her earlier responses.

Jeff BOURMAN: Minister, this bill does not specify that underground gas must be used for domestic sale first. What assurances can you give that this will happen and we will not be selling gas off for a profit elsewhere whilst domestic users get caught short, using the fact that the underground storage is not directly referenced in either the bill or the current act?

Ingrid STITT: Mr Bourman, the government agrees with you that Victorian gas should be and must be used in domestic markets and profit-driven exporting at the expense of Victorian families and businesses has needlessly and directly led to some of the higher gas prices for Victorian families and businesses. That is why it was the Labor government that passed an amendment to this legislation in 2020 which forced holders of a petroleum production licence to offer their gas to the domestic market on reasonable grounds before they could even consider selling it to an exporter. I would like to reassure you, Mr Bourman, that the existing section 152A – it is a long day – of the Offshore Petroleum and Greenhouse Gas Storage Act requires any gas purchased under a Victorian petroleum production licence to be directed to a domestic user of the gas or to a party that will sell it to a domestic user. If the regulator is satisfied that there is no domestic market for the gas, then the producer must then notify the minister of their intention to market the gas to exporters. There are a number of steps that have to be followed. Section 152A applies to all petroleum recovered under a petroleum production licence granted on or after 1 May following the passage of the government’s amendment of the act. Petroleum recovered under a petroleum production licence granted on or after 1 May 2018 will include gas recovered from underground petroleum storage.

This will apply to the Golden Beach energy storage project, which does not yet have a petroleum production licence. All gas that will be extracted from this project prior to it becoming a storage facility has been purchased by Origin Energy, which will then be resold in the domestic market. The facility will then transition to a storage facility, with initial capacity sold to Snowy Hydro. We note, Mr Bourman, your focus on this key issue and wish to convey to you the government’s firm commitment to it as laid out in the 2020 amendments.

Sarah MANSFIELD: Minister, the project this bill has been designed for, the Golden Beach energy project, is meant to run for 40 years. How does a 40-year gas project align with Victoria’s net zero target of 2045?

Ingrid STITT: Obviously the government has a gas transition plan roadmap. This is part of managing that transition, and of course the project is subject, as I have said in answer to a number of other questions, to all the appropriate environment and planning requirements under a number of different acts.

Sarah MANSFIELD: Thank you, Minister, for that response, but I guess the question is specifically about this project having a 40-year life span while we have a net zero target of 2045 in Victoria. It is currently 2024. Forty years brings us to 2064, so I am just trying to understand how a gas project that has a life span of 40 years fits with a net zero target of 2045.

Ingrid STITT: I understand the direction of your question, Dr Mansfield. Of course we say the bill is consistent with the direction outlined in the Victorian Gas Substitution Roadmap. The commercial lifetime of the project is a matter for the proponent. The government, notwithstanding what the proponent may bring forward, is committed to our net zero targets and indeed committed to our Victorian Gas Substitution Roadmap.

Sarah MANSFIELD: Have any traditional owners or First Nations groups been consulted on this bill?

Ingrid STITT: Yes, there was a cultural heritage management plan and consultation with traditional owners. That heritage management plan was, as I understand it – just let me double-check the details of the traditional owners group that was consulted.

Dr Mansfield, the Gunnai/Kurnai have been consulted about the project, and as I indicated, there has been a cultural heritage management plan undertaken.

Sarah MANSFIELD: Has the government conducted any analysis of the short- and long-term environmental risks of using reservoirs like this for gas storage, and if so, what have you found?

Ingrid STITT: Any project of this nature is subject to environmental assessment requirements. Obviously in terms of the project itself, it was subject to an environment effects statement, and that has been approved. And there will have been a number of environmental undertakings. I think you have just heard me explain to Mr Davis what they were in respect to marine life and fishing, but other environmental assessments would have been undertaken as part of that planning process and approval process.

Sarah MANSFIELD: We know that there have been issues with oil and gas infrastructure offshore leaking in recent times, and we in fact have an inquiry coming up into that issue, so I am just wondering if you are aware of any specific measures that the government is putting in place to manage this potential risk of leaking? How will they be detected and managed, and what obligations will be placed on the companies themselves to manage this risk and manage the life cycle of the infrastructure, including decommissioning?

Ingrid STITT: Any project of this nature has to have a vigorous environmental assessment undertaken. In terms of your concerns about the potential for any stored petroleum to leak from the storage facility, again, an environment management plan must be made under the act, and it is monitored by the regulator, NOPSEMA. They are responsible for monitoring health and safety for offshore projects in Victorian waters. Any reservoirs to be used for underground petroleum storage can only be ones that were found to contain petroleum. In addition to the natural geological separation between storage formations and aquifers, well integrity measures further reduce any chance of gas leaking and contaminating our water supplies. Offshore petroleum legislation, Commonwealth and state, is very clear that the responsibility for remediating any impacts to the environment from exploration and production must be completed by the project developer, and it is really incumbent on them to satisfy the regulators and satisfy the planning and environmental assessment requirements.

Sarah MANSFIELD: Further to that, can you provide any assurances that taxpayers will not be left responsible for the cost of any clean-up in the event of a leak or the cost of decommissioning this infrastructure?

Ingrid STITT: Again, it is a question of the regulator ensuring that the operator is fully responsible. The legislation makes it clear that the costs of decommissioning are to be borne by the developer.

Sarah MANSFIELD: Just one last question: the basis for putting forward this bill that the government has provided is that we are facing a gas shortage, and I am interested in understanding what analysis has been done to determine whether we could avoid this so-called gas shortage by looking at demand-side measures like rapid electrification and energy efficiency measures. Has that work been done? If so, what has it shown, given that the justification for this bill is that we are facing a gas shortage?

Ingrid STITT: I think, without going on too long at this time of the night, you understand the government’s very strong commitment to the energy transition path that we are on. As I indicated I think in my summing up on the bill, we have to face the reality – and this is based on advice that we are getting from not only our department but also AEMO – that our supplies are depleting rapidly in Victoria when it comes to conventional gas and we need to take these steps to allow for additional storage capacity while we manage that depletion and whilst we ramp up our transition to renewables. This is not a step away from any of that. This is a way of managing the realities that we face. Once upon a time our gas reserves were plentiful and cheap. That is just not the case anymore, so of course we are absolutely focused on continuing to transition off fossil fuels. That is why we have a strong pipeline of projects and investment and indeed a solid plan for transitioning to renewables.

Bev McARTHUR: Minister, do you accept that there are many industries that need gas and that electricity is no substitute?

Ingrid STITT: Mrs McArthur, I would agree that there are a number of industries that are reliant on gas more than other industries. That is why it is important to have additional capacity to continue to support those industries that are not going to be able to electrify as quickly as some others, so yes, we do acknowledge that that is a fact.

Bev McARTHUR: So, Minister, you have admitted there is a gas shortage, and it was good to hear in answer to a question from Mr Davis that the government would be happy to encourage other offshore gas enterprises to do exploration. Will you also be encouraging onshore gas exploration?

Ingrid STITT: Onshore conventional gas exploration is already permitted. Yes, it is already permitted, Mrs McArthur. This bill is not about that.

Bev McARTHUR: It is good to hear, Minister, that you will be encouraging more onshore gas exploration. That is fantastic. Minister, in relation to the cultural heritage management plans that Dr Mansfield referred to, can you just confirm that these cultural heritage rights extend 3 kilometres offshore?

Ingrid STITT: Mrs McArthur, thank you for your patience. The cultural management plan that I have referred to a couple of times this evening relates to the land and the pipeline but not sea country.

Bev McARTHUR: Just as you are extracting $256 million each year from AusNet for transmission line easements, will there be any tax on easements in this project?

Ingrid STITT: Your question is not in the scope of the bill at all. The bill is specifically about giving certainty around offshore storage.

Bev McARTHUR: I just want to be clear that the government will be ruling out any extra taxes on this project, either in their storage capacity or as they bring it onshore.

Ingrid STITT: Points for trying to verbal me, but this is a bill specifically about giving certainty around storage offshore; it is all about that, Mrs McArthur. I know where you are heading, but you are really just making mischief.

Business interrupted pursuant to standing orders.

Ingrid STITT: Pursuant to standing order 4.08, I declare the sitting to be extended by up to 1 hour.

Clause agreed to; clauses 2 to 34 agreed to.

Reported to house without amendment.

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (22:00): I move:

That the report be now adopted.

Motion agreed to.

Report adopted.

Third reading

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (22:01): I move:

That the bill be now read a third time.

Motion agreed to.

Read third time.

The DEPUTY PRESIDENT: Pursuant to standing order 14.28, the bill will be returned to the Assembly with a message informing them that the Council have agreed to the bill without amendment.